Whether the special surtax on the transfer of land, etc. is included in the non-deductible items when calculating liquidation income.

In calculating the liquidation income amount pursuant to Article 43 (7) of the Act, it is reasonable to interpret that the corporate tax paid or to be paid for each business year, which is cited as the non-deductible item, shall be included in the special surtax on the transfer of land, etc. in addition to the corporate tax on liquidation income. Thus, the initial imposition of the liquidation income calculated without deducting the special surtax paid by the plaintiff

The contents of the decision shall be the same as attached.

1. The plaintiff's claim is dismissed. 2. The costs of lawsuit are assessed against the plaintiff.

1. Details of the imposition;

The following facts are either disputed between the parties, or acknowledged by Gap evidence 1 through 6, Gap evidence 8, Eul evidence 1-1 through 6, and there are no counter-proofs.

A. The plaintiff was incorporated on January 12, 195 for the purpose of manufacturing the Dong Sub-Section, and was incorporated on March 23, 1992 by the general meeting of shareholders on March 23, 1992, and filed a dissolution dissolution registration and completed the liquidation procedure on June 19, 193, and completed substantially the liquidation procedure on June 19, 1993. However, the registration of termination of liquidation was not completed.

B. On March 28, 1992, the Plaintiff concluded a sales contract on April 30, 1992 with respect to the real estate listed in the separate sheet (hereinafter the real estate in this case), which is owned by the Plaintiff, on March 28, 1992, with the period of liquidation, as the purchase price of KRW 4,774,670,00, and the remaining payment date of the purchase price, and concluded the sales contract on April 30, 1992, and received any balance on the agreed date, and completed the liquidation procedure, under Article 43(1) of the Corporate Tax Act (amended by Act No. 4282, Dec. 31, 1993; hereinafter the same shall apply), Article 116 of the Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 14080, Dec. 31, 193; hereinafter the same shall apply), and confirmed the Defendant as the total amount of the corporate tax for the transfer of the real estate in this case as the liquidation income amount.

C. The defendant, on January 7, 1997, applied the deduction amount of the special surtax to the amount of the remaining assets and calculated the liquidation income amount of KRW 2,543,858,076 and calculated the liquidation income amount of KRW 850,911,745, and KRW 197,0772, which was reported by the plaintiff as the deductible amount of the special surtax, including KRW 973,456,813, which was reported by the plaintiff as the deductible amount of the special surtax, and KRW 1,046,46,076,073 which was reported as the deductible amount of the total of KRW 1,57,070,127,981,872 (the first reported amount of the special surtax shall not be deducted from the residual assets amount of the liquidation income calculation and underreporting the above amount of the remaining assets. The disposition imposing the special surtax was imposed upon the plaintiff as the above increased tax amount of KRW 52,588,97.79).

2. Whether the instant disposition is lawful

A. The parties' assertion

The defendant asserts that the disposition of this case is legitimate under related Acts and subordinate statutes, and Article 43 (1) of the Act and Article 116 (1) of the Enforcement Decree of the Act provide that liquidation income, which is the tax base of corporate tax on liquidation income, shall be the amount obtained by deducting the total amount of paid-in capital, investments and surplus funds (hereinafter "total amount of equity capital") from the total amount of total amount of assets, and the value of residual assets shall be the amount obtained by deducting the total amount of liabilities (excluding the total amount of equity capital) from total amount of assets. The special surtax amounting to be paid by the plaintiff shall be deducted from the total amount of assets of the plaintiff as of March 21, 1993, as of March 21, 1993, although the plaintiff's liabilities to the state as of March 21, 1993

(b) Related statutes;

Article 2 (1) of the Act provides that corporate tax shall be imposed on income for each business year and liquidation income. Of them, Article 43 (1) of the Act provides that where a domestic corporation is dissolved, the liquidation income amount shall be the amount calculated by deducting the total amount of its equity capital as of the date of dissolution (the date of the registration of dissolution) from the value of residual assets from dissolution of the domestic corporation. Article 116 (1) of the Enforcement Decree of the Act provides that the value of residual assets under Article 43 of the Act shall be the amount calculated by deducting the total amount of liabilities from the total amount of assets. Article 116 (2) of the Act provides that "total amount of assets shall be the total amount of assets as of the date of dissolution, but for claims to be collected and assets to be converted and disposed of under subparagraph 1

Article 43(7) of the Act provides that the provisions of Articles 9 through 21 shall apply mutatis mutandis to the calculation of the amount of liquidation income under the provision of paragraph (1) of this Article. Article 9(1) provides that the income of a domestic corporation for each business year shall be the amount obtained by deducting the total amount of deductible expenses which belong or comes to the corresponding business year from the total amount of gross income which belongs or comes to belong to the corresponding business year. Paragraph (2) and paragraph (3) of this Article provides that "the amount of gross income shall be the amount of earnings accruing from transactions which increase the net assets of the corporation except for capital or financing and what is provided in this Act, and the amount of deductible expenses shall be defined as the amount of losses incurred from transactions which reduce the net assets of the corporation except for the refund of capital or shares, disposal of surplus funds, and this Act. Article 12(1) of the Enforcement Decree provides that "the amount of deductible expenses" refers to the amount of transfer of assets under subparagraph 2 of this Article, which includes the book value at the time of transfer of assets under subparagraph 10, taxes and public charges.

In addition, Article 59-2 (1) of the Act provides that the tax base of special surtax shall be gains on transfer from the transfer of land, buildings, etc. as determined by the Presidential Decree, and Article 59-2 (3) provides that gains on transfer under paragraph (1) shall be the amount obtained by deducting the amount specified in each of the following subparagraphs from the transfer value, and subparagraph 1 provides that subparagraph 2 provides that acquisition

C. Determination

However, Article 16 (1) of the Act which applies mutatis mutandis to the calculation of liquidation income amount under Article 43 (7) of the Act provides for corporate tax paid or to be paid in each business year as non-deductible income. The purport of such corporate tax is that corporate tax should not be deducted in calculating corporate income in light of the fact that it is a taxation on corporation's income, and thus, it is unfair that corporate tax should be deducted again in calculating corporate income. As such, this is not only because corporate tax on liquidation income of a corporation is included in corporate tax, but also special surtax on transfer income generated from the transfer of real estate is also a taxation on corporation's income, as well as special surtax on transfer income under the Income Tax Act which is calculated separately regardless of the total income and transfer income tax in calculating global income, so it is unreasonable that the liquidation income and transfer income tax generated from the transfer of real estate should not be deducted within a certain scope (the portion imposed on the revaluation income of a corporation among the transfer income of real estate in liquidation, which is not subject to the deduction of corporate tax under the Assets Revaluation Act, which shall not be included in the special surtax tax on liquidation income amount.

3. Conclusion

Therefore, the plaintiff's claim of this case based on the premise that the disposition of this case by the defendant is unlawful is without merit, and it is dismissed as per Disposition.

April 24, 1998